Improving the Business Performance of Mid-Stream Gathering and Processing Assets

Presented with Crosstex Energy Services L.P. 2006 National GPA Meeting

Rodney Madden Crosstex Energy Services L.P. Dallas, Texas, U.S.A

Steve Hendon and Mark E. Roop eSimulation, Inc. Houston, Texas, U.S.A.

ABSTRACT Mid-stream assets are currently managed from a commercial perspective using traditional spreadsheet tools. These tools are used to analyze gathering and processing options based on current index prices and to evaluate the margins generated by new well connects. Spreadsheets are effective. However, they are cumbersome to use when trying to evaluate multiple contract types, multiple sales points, compressor/plant performance capabilities, and moving index prices.

As Crosstex Energy Services LP (Crosstex) has continued to grow, and its business has begun to move at a much faster pace, their need to reduce dependence on traditional spreadsheets has increased. Traditional spreadsheet tools are difficult to maintain, prone to errors, and may not accurately represent the true capabilities of the gathering and processing systems.

After the acquisition of the Louisiana Intrastate Gas (LIG) gathering and processing system, Crosstex commissioned eSimulation, Inc. (eSimulationSM) to develop a graphical modeling tool to replace the traditional spreadsheet tools used by gas supply personnel. The new graphical model would need to be nontechnical, easy to use, and easy to modify to keep track of the ever changing market and operational conditions. The result of this effort is a software product called eSimEvaluator.

This paper will describe the commercial challenges that affect mid-stream profitability, how Crosstex built a model of the complicated gathering system using eSimEvaluator to address those challenges, and how the model is used to optimize system margins. The tool is now available to use at other Crosstex gathering and processing assets and has been shown to help drive commercial business decisions.

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